For years, weightings in equity indexes typically were based on the stock-market values of their components. Why that might not be the best approach.

DOES THE STOCK MARKET NEED a better index? That question lies at the heart of a contentious debate that has divided money managers and, because of the billions at stake, promises to escalate.

In one corner are traditionalists who maintain that a decades-old custom -- weighting indexes according to their components' stock-market value -- works just fine. In the opposing (and increasingly crowded) corner are dissidents who argue that...